It seems like everyone is speculating about the next Bitcoin bull run and predictions are many in the crypto space. The big questions on the minds of investors and those considering investment are the same. Is the bottom in? Has accumulation phase begun? When will the next bitcoin bull run start? How big will it be, and what might trigger it? The answers are something no one has, but everyone weighs in on. So let’s take a look at some theories that make sense, but may or may not play out.
Bitcoin Bull Run
There are comparisons to other assets, such as gold, that are used as indicators. Some believe that, while still in a bear market, Bitcoin has improving fundamentals which indicate a new bull market is in the making. Others are certain a trigger for a Bitcoin bull run could be a global financial crisis that occurs when the realization dawns that $20 trillion in debt can’t be paid back without printing more fiat. Some feel there will not be another bull run until the altcoins fail, investors forget about the last bull run, and most believe crypto is done.
There are some signs investors, traders, and analysist feel will be seen before we have the next Bitcoin bull run. The “double bottom” is one sign bearish momentum has been lost. Those drawing parallels to the previous bitcoin market cycle feel this is a plausible sign. Some feel the bottom is in, others do not – so uncertainty is the only certainty. A bearish crossover of the 50 and 100 week moving averages are considered by many to be another sign and look for such by the end of 2019. If history were to repeat itself, a Litecoin breakout could signal the end of the bear market. The upcoming third halving of bitcoin will occur mid-2020, and this also could signal the start of a bitcoin bull run, which happened in the last two market cycles.
The Bitcoin reward halving for mining occurs every four years. Rewards for mining are cut in half and is a policy of the protocol designed to reduce inflation due to the resulting increase in scarcity. These halvings typically have coincided with a price increase. In November 2012, the first halving led to a huge bitcoin bull run and a new all-time high. Again in 2016, the second halving saw Bitcoin go from $177 in January 2015 to $648 just afterward.
Previous market movements are considered to be the best data an investor or trader can use to anticipate future movement. But history doesn’t always repeat itself, especially when market news can skew the best of technical analysis. If the bottom is in, there is a good chance it will be touched again and that will spur some growth. Growth would cause the weekly moving average crossover giving a bull signal. Should Litecoin follow a similar pattern as what occurred a few years ago, Bitcoin could follow suit and the next bull run could begin. It is clear that all these indicators would support each other and again, the only certainty is the uncertainty.
Another indicator you may find helpful is the “Fear and Greed Index” which analyzes the current sentiment and crunches the numbers into a simple, visual indicator gauge.
There are two simple assumptions:
- Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.
- When Investors are getting too greedy, that means the market is due for a correction and could be a “take profit” opportunity.
The current sentiment of the Bitcoin market in a simple meter from 0 to 100. Zero means “Extreme Fear”, while 100 means “Extreme Greed”. Learn more here.
Saying crypto investors and markets are driven by emotion is an understatement, and short-term price movements are definitely driven by sentiment. FOMO, FUD, or a ton of other acronyms created to describe trading conditions in the crypto space can be valuable indicators of market direction. It is often more profitable to take the opposite side of a trade when investors or either fearful or greedy. However, the more profitable calculations also take into account the long or the short term factors driving investor sentiment. Long term fear and greed indicators help find days while short term helps find hours within those days to help create a profitable trading strategy using sentiment.
Regardless of your strategy to gauge the start of the next bitcoin bull run, wider adoption of bitcoin and its use for payments will serve to increase awareness and price. That could be the key to increasing demand to trigger the next bull run.